The title of this piece is stunning. It raises the following question:

Which wooly brained investors would sell stocks based on a statement from the Standard and Poor's Rating Agency (S&P)?

The very same clowns that placed a high rating on Enron, Lehman Bros, Merrill Lynch, et al, are being listened to by investors! This ratings agency might downgrade the US status from AAA! More to the point is why is it still AAA? Wake up! The debt mountain is getting bigger by the day and still no resolution in sight................. the mind boggles.

Anyway this is not a bad summary of the state of play from the Guardian in the UK as follows:

Shares fell heavily on Wall Street on Monday after a leading ratings agency fanned fears of Europe's debt crisis spreading across the Atlantic by issuing a strong warning about America's failure to tackle its budget deficit.

In a move seen by Wall Street as a "shot across the bows" of bickering politicians in Washington, Standard and Poor's (S&P) said it was cutting the outlook on the US's long-term rating from stable to negative for the first time since the attack on Pearl Harbor 70 years ago.The announcement surprised the financial markets, where attention in recent months has been focused on the problems of the weaker nations of the eurozone. Renewed speculation that Greece will be forced to default on its debts led to a sharp sell-off in the euro, but S&P stressed that the US was not immune from the sovereign debt crisis.

In New York, the Dow Jones industrial average ended the day down 140 points, or 1.1%, with the dollar weaker on the foreign exchanges and yields rising on US treasury bills. The FTSE 100 in London was down 126 points at 5870 – a drop of more than 2% – as ongoing concerns about the eurozone's debt crisis were compounded by the setback for the world's biggest economy.

George Osborne, the chancellor, seized on the S&P warning as vindication for the coalition's stance towards deficit reduction. "S&P did the same to the UK before the election but revised us back to 'stable' following the spending review because we had a credible deficit plan," a senior Osborne aide said on Monday. He added that Labour's more cautious approach to cutting the UK's deficit was "way out of step with world opinion".

Speculation that Greece may be forced to default on its debts and a strong performance by nationalists in the Finnish election opposed to supporting the bailout of Portugal combined to send the London index down. The main stock markets in France and Germany were also down sharply on the day.

S&P said that compared with the small number of developed countries with a coveted AAA rating, the US had "very large budget deficits" which reached as high as 11% in 2009. With the political infighting between the Republicans and Democrats on the deficit now so bitter that there was a risk of the US government being shut down earlier this month, S&P said it had taken the decision to change its outlook because "the path to addressing these issues is not clear to us".

It added: "We believe there is a material risk that US policymakers might not reach an agreement on how to address medium- and long-term budgetary challenges by 2013; if an agreement is not reached and meaningful implementation is not begun by then, this would in our view render the US fiscal profile meaningfully weaker than that of peer 'AAA' sovereigns."The White House, which last week produced proposals that would cut $4tn from the US deficit by 2022, rejected the S&P analysis. "They are saying their political judgment is that over the next two years they didn't see a political agreement" to reduce long-term deficits, Austan Goolsbee, chairman of the Council of Economic Advisers, said in an interview with Bloomberg Television. "I don't think that the S&P's political judgment is right."

While Europe has decided to make a priority of deficit reduction, the US approach has until now involved running an expansionary fiscal policy in an attempt to deliver faster growth.

Republicans have accused the Obama regime of "mortgaging the country's future", and Paul Ryan, the chairman of the House of Representatives budget committee, has come up with a more aggressive plan that would involve deep cuts in non-defence spending.

Nikola Swann, S&P's credit analyst, said: "We view President Obama's and congressman Ryan's proposals as the starting point of a process aimed at broader engagement, which could result in substantial and lasting US government fiscal consolidation. That said, we see the path to agreement as challenging because the gap between the parties remains wide. We believe there is a significant risk that congressional negotiations could result in no agreement on a medium-term fiscal strategy until after the 2012 congressional and presidential elections."

Ted Scott, director, Global Strategy at F&C, said: "The markets were caught by surprise by today's announcement at a time when analysts had been downgrading growth expectations for the US, mainly as a result of poor weather in the first quarter of 2011 and higher commodity prices.

"The downgrade is, however, only in the outlook and is unlikely to lead to a cut in the rating itself. Indeed, it should focus the mind of the politicians of all parties to agree a credible debt reduction plan now that the clock is ticking on its debt rating."

We draw your attention to the words: "The downgrade is, however, only in the outlook and is unlikely to lead to a cut in the rating itself.

So there you have it, its got us beat, so we will stick to gold and silver thanks.